§ 179.101. How does the Secretary distribute principal and income to the holder of a life estate?
217 words·~1 min read·
/us/cfr/t25/s§ 179.101·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)This section applies to the following cases:
(1)Where the document creating the life estate does not specify a distribution of proceeds;
(2)Where the vested holders of remainder interests and the life tenant have not entered into a written agreement approved by the Secretary providing for the distribution of proceeds; or
(3)Where, by the document or agreement or by the application of State law, the open mine doctrine does not apply.
(b)In all cases listed in paragraph
(a)of this section, the Secretary must do the following:
(1)Distribute all rents and profits, as income, to the life tenant;
(2)Distribute any contract bonus one-half each to the life tenant and the remainderman;
(3)In the case of mineral contracts:
(i)Invest the principal, with interest income to be paid to the life tenant during the life estate, except in those instances where the administrative cost of investment is disproportionately high, in which case paragraph (b)(4) of this section applies; and
(ii)Distribute the principal to the remainderman upon termination of the life estate; and
(4)In all other instances:
(i)Distribute the principal immediately according to § 179.102; and
(ii)Invest all proceeds attributable to any contingent remainderman in an account, with disbursement to take place upon determination of the contingent remainderman.